Government accelerates warship building in bid to prop up South Australian economy

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Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

The government has unveiled a centrepiece of its coming Defence White Paper, bringing forward a A$40 billion program to build surface warships, centred on the economically ailing state of South Australia.

The acceleration is aimed at saving jobs that would have otherwise been lost on the original timetable.

During an intensive campaigning visit to SA – where unemployment is above 8% and the Coalition’s stocks are at rock bottom – Tony Abbott said that from 2020 onward those employed continuously in surface naval shipbuilding would climb to about 2500.

Most of the workers would be in Adelaide “because Adelaide is where the major shipbuilding infrastructure is”.

But senator Nick Xenophon, who plans to run lower house candidates in the election, immediately questioned the credibility of the government’s commitment, given that it appeared to be walking away from a 2013 election promise by its then-defence spokesman David Johnston to build 12 submarines in SA.

Where the submarines are to be built is yet to be determined. However, the government has pledged there will be substantial work, especially from maintenance, in SA.

The government said that over the next 20 years, $89 billion would be invested in ships and submarines for the Australian Navy.

In Tuesday’s announcement, the Future Frigate program to replace the ANZAC class frigates will be brought forward to start in 2020, three years earlier than scheduled under Labor’s Defence Capability Plan.

Construction of Offshore Patrol Vessels, or Corvettes, to replace the Armidale class patrol boats, is to be brought forward by two years, to begin in 2018.

The government says that in the short term, the bring-forward will sustain around 1000 jobs that would otherwise have been lost.

“It should mean that at no stage does the total number of jobs in naval shipbuilding in Australia drop below about 1000, so that when we do start building up again to 2500 from 2020, it’s not the cold start that would otherwise be the case,” Abbott said.

But in the meantime there will be a dip in employment from the present level of about 2000. Abbott said the government could not entirely make up for the neglect of decision-making between 2008 and 2013.

Defence Minister Kevin Andrews said that “never before in the history of federation has a national government announced a continuous ship build in Australia”.

While the major surface shipbuilding will be in Adelaide, the subordinate yard could be in SA or elsewhere, for example at Williamstown in Victoria.

In relation to the submarines, Abbott said the government had asked the various potential partners to give a price for a domestic build, a hybrid build and an offshore build.

Xenophon, who polled nearly two quotas at the Senate election, is targeting in particular the Liberal seats of Hindmarsh, Boothby, Sturt and Mayo. The latter two seats are held by ministers Christopher Pyne and Jamie Briggs respectively.

Xenophon said the government could not expect to be believed on the frigates until it delivered on its promise to build the $50 billion submarines in SA.

Xenophon said the promised frigate build was at least two elections away and the announcement was “alarmingly short on detail”.

Labor defence spokesman Stephen Conroy said that “what we’re seeing today is a circus in South Australia to protect Tony Abbott’s job and Christopher Pyne’s job”.